by Jack Waymire
How do you truly find the top financial advisors and not just fall for the best sales pitch? Picture this:
You pull up to a car dealership and there are salespeople already waiting for you, watching you drive up and park. As soon as you open the car door, there’s already at least one right behind you ready to make a sale.
It’s immediately stressful and your guard is up.
But what if you could turn to that salesperson and say, “I’m actually looking for So-and-So. I’m interested in This Car and want This Price, which I saw it advertised for online.”
This changes everything. Your stress level decreases and you’re now in control.
The same feeling and situation can happen with a financial advisor. Maybe an advisor sent you an offer for free lunch or called you on the phone and set up a one-on-one meeting so they can “talk with you and learn about your financial needs,” but when you arrive, you feel they’re trying to sell you something and your anxiety increases.
Well, just like the dealership example above, you can change this. The Internet has given you that power.
The Internet allows you to control the selection process. It allows you to find, research and contact financial advisors ahead of time and then control that information to make an objective decision.
The Internet provides a new level of transparency that helps you select the top financial advisors for the right reasons. When you use the Internet to protect your financial interests, advisors are no longer your sole source of information that determines who you select. All you have to do is know how to use the Internet to find, research, contact and monitor financial advisors.
The Internet allows you to:
- Determine who you want to talk to
- Research advisors before you contact them
- Maintain your anonymity during the research process
- Determine who you contact for interviews
- Make objective decisions based on facts and not sales pitches
Exposing the Wall Street Sales Culture
It stands to reason that the less you know about planning and investing, the more vulnerable you are to salespeople who claim to be financial experts. But are they real experts or are they salespeople masquerading as experts?
Your vulnerability increases exponentially when you don’t know much about financial advisors.
As far as Wall Street is concerned, the less you know about advisor credentials, ethics and business practices, the easier it is to prey on your need for financial advice and services. This general lack of knowledge exposes you to a major financial risk – you select a bad advisor for the wrong reasons.
The sales practices of financial advisors expose the ugly underbelly of a sales culture that has dominated Wall Street for 50 years. Wall Street firms do not grow because they deliver superior advice and services. They grow because they have superior marketing, advertising and PR along with vast distribution systems comprised of hundreds of thousands of salespeople. Most investors do not stand a chance against these highly skilled salespeople. Many of them are so good, they can convince you they are real financial experts even when it is not true.
The good news is Wall Street’s iron grip on your advisor selection process is gradually receding. The Internet has made this possible.
Anonymity is Power
How is anonymity power? You can use the Internet to learn a lot about financial advisors when they don’t even know you exist. There is no contact until you are ready to interview pre-screened advisors. Then you control who you contact.
You will not select the best advisor if you limit your search to advisors who contact you.
You have to control who you talk to. This is one of the biggest impacts of the digital age. Although you may still be solicited by Wall Street salespeople, their ability to contact you is becoming increasingly difficult. Thanks to Caller ID and the National Do Not Call Registry, you are much less likely to be contacted by financial advisors who make hundreds of telemarketing calls per day.
You should never buy investment products over the telephone and you should not interview advisors who contact you. Why? There is a 99 percent chance the advisor is a sales representative who is willing to put up with a lot of rejection to get in front of you.
The same goes for junk mail that offers a free meal at a local restaurant. This means the advisor is willing to spend serious money just to meet you. Why? Meeting you is the first step in his sales process. Junk mail offers should go directly in the trash can.
You may be contacted by an advisor who was given your name by someone you trust – a friend, family member, associate or your CPA. This was one of Bernie Madoff’s most successful marketing tactics. But you still have to research the referred advisor’s qualifications before you interview him or her. The referral source may know a good advisor from a bad one, but referral sources can also have conflicts of interest.
The biggest mistake investors can make is to allow subjectivity to influence their advisor selection decisions. Intuition is not the right way to start the process of selecting the best financial advisor.
In fact, subjectivity makes it easy for salespeople to prey on investors who make emotion-backed decisions. For example, they use greed and fear to sell particular financial products.
The information on the Internet enables you to make objective selection decisions that are based on facts and not sales pitches.
Sure, you can find sales content on financial advisor websites. But you also have access to a lot of other information that is not controlled by the advisors. It is this information that will help you make the right decisions when you are looking for the top financial advisors and firms.
Any potential subjectivity has to come at the end of your selection process when you choose between two equally qualified finalists. Then and only then should you select the one you would “feel” most comfortable working with.
Monitoring Current Advisors
Why monitor current advisors? Because you don’t want to be blindsided by an event or advisor action that has the potential to damage your financial interests. For example, you might learn that your advisor has been censured by a regulatory agency or files for personal bankruptcy. You want to identify problems as soon as possible so you can minimize their impact on your assets and financial future.
The Impact of the Internet
All industries resist change, but the Internet is too powerful to resist. Like it or not, the change is happening and there is nothing Wall Street can do about it – except adapt to some new realities.
Just as the Internet has impacted other industries, it is beginning to impact the relationships between investors and their financial advisors. It has already ushered in new types of advisors (robo, virtual) and services.
Amazon used the Internet to change the way people buy books. Investors are using the Internet to change the way they select and retain financial advisors. And it’s not just the Millennials who are more comfortable with technology. It is also their parents and grandparents who control trillions of dollars of assets.
All of this control and power is at your fingertips. You just have to know how to use it.
Jack Waymire worked in the financial services industry for 28 years before he left to found the Paladin Registry (www.PaladinRegistry.com) in 2004. This investor education website was based on the Principles in Jack’s first book: “Who’s Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor.”
The Registry also has a free service that matches investors to advisors who meet Paladin’s minimum requirements for competence and trustworthiness.
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